Time to ditch and switch your bank account?

Customers switch from big five after scandals

Confidence in the big banks continues to collapse as scandal after scandal unfolds

Hundreds of thousands of customers moved their current accounts from the big five banks – Barclays, Lloyds, HSBC, RBS and Santander – last year. And a recent YouGov poll showed 14 million customers could join them this year.

About 500,000 people switched accounts in the first six months of 2012, according to Move Your Money – a campaign to encourage people to take their cash away from the banks that are the biggest offenders and put it elsewhere.

Shoddy

The Co-operative Bank enjoyed a 43% increase in new accounts and credit unions took on 20,000 new members.

And it’s no wonder when you consider some of last year’s horror stories showing the banks have continued to behave badly, offering shoddy service and unfair ­products that work for them, rather than their customers.

Banks are being investigated over dodgy rate-fixing deals between themselves that could have effected what we pay for ­mortgages, personal loans and pensions.

The FSA saw complaints against the big banks shoot up 59% during the first half of 2012. Barclays was found guilty of fixing interest rates and heads rolled, including chief executive Bob Diamond, after it was fined £290million for manipulating Libor – the rate banks pay to borrow money from each other.

RBS still offered £500million bonuses, despite the ongoing poor performance of its share price since 2009.

Laura Willoughby, chief executive of Move Your Money, said: “The reputation of one of our leading industries is in tatters. Ultimately, customers are on the front line of the battle to save British banking. By moving their money to banks which are fair and transparent, they are forcing banks to think twice about the way they behave.

“Cultural change doesn’t come from Whitehall or the boardroom, it comes from people realising the power of what’s in their pocket.”

But Move Your Money warned that banking will continue to make scandalous headlines well into 2013.

“If you think last year’s banking scandals were unbelievable, there is more to come,” said Willoughby.

“From RBS fines for the Libor scandal to further exposure of mis-selling products to customers, big banks will continue to lose ground when it comes to public trust.”

RBS faces a fine for the Libor scandal early this year – and it could be closely followed by Lloyds and HSBC.

RBS and Barclays have been accused of lying about Libor in order to bolster trading profits and protect ­themselves from losses.

This is not a victimless crime – we have all been affected as we can never be sure if we have been paying a fair price for mortgages, loans and pensions.

“This was greed, pure and simple,” said Willoughby. “RBS and other banks have undermined trust in the very foundations of our financial system. Savers have lost out and banks will try to recoup the cost of their fines from their customers.”

There are 54 million current accounts in the UK and the big five provide more than 80% of Brits with their main account. Banks will continue with this totally ­unacceptable behaviour unless we take action and show them we mean business by taking our money elsewhere.

Anger

The good news is that from September it will be much quicker to do this and switch an account.

Legislation comes into force that will see the time required for the switching of accounts and redirecting direct debits cut from 31 days to seven – as recommended by the Vickers report, launched in the wake of the financial crisis.

Willoughby said: “The Government debate and vote on banking reform this year should expose the depths to which banks are willing to sink in order to fix, scam and boost their profits.

“The only way for customers to show their anger is to move their cash ­elsewhere.

“What else can we do when it appears that banks are not only too big to fail, but too big to jail?”